California Finds the Missing Piece of the CO2 Emissions Puzzle

This article was written by Charles Lockwood, a green real estate authority and consultant based in southern California and New York City. His articles have appeared in the Harvard Business Review, New York Times, Wall Street Journal, and Barron’s.

California—the state that invented freeways and suburban sprawl—has become a trendsetter again, and not a moment too soon in our new age of global climate change. In October 2008, California Governor Arnold Schwarzenegger signed into law SB375, which was supported by environmentalists, homebuilders, and cities and counties. SB375 will limit the state’s CO2 emissions by curbing suburban sprawl and increasing transit-based development through various incentives.

If a community plans walkable, mixed-use, transit-oriented growth that reduces automobile use and greenhouse gas emissions, for example, it gets moved to the front of the line for state and federal transportation funds. If a proposed building is located near a transit line, it will have an easier environmental review process. Why is SB375 important?

Transportation—primarily automobiles—generates one-third of U.S. greenhouse gas emissions. Green buildings, no matter how high performance, cannot reduce the world’s greenhouse gas emissions on their own.

Sprawl is a major culprit. In suburban San Bernardino County, California, for example, households make an average of 10 car trips a day, because their homes, workplaces, schools, stores, and friends are miles apart from each other, and transit options are limited. All of those cars trips generate a lot of greenhouse gas emissions.

Because of sprawl, the number of cars is growing faster than the number of people in the U.S. Between 1980 and 2000, 1.2 vehicles were added to the roads for every 1 person increase in the population. Because of ever-expanding sprawl, all of those cars are being driven longer distances than ever before. Between 1980 and 2000, the total number of vehicular miles driven grew by 80%, more than three times faster than the 24% U.S. population increase in those years.

Today, Americans are driving over 365 billion miles annually and producing 154 million metric tons of carbon dioxide just going to the store. Meanwhile, U.S. commuters are generating 1.3 billion tons of carbon dioxide a year.

Walkable, mixed-use, transit-oriented communities generate far less greenhouse gas emissions per capita than low-density suburbia. One 2006 study of greater Chicago found that the average household in a low-density auto-dependent exurb generates about 11.5 tons of CO2 annually. A household in a suburban area that is served by commuter rail generates 9 tons on average. And a household in Chicago itself or in one of the nearby rail-connected walkable suburbs generates just 2.5 tons of CO2 annually—only 22% of the amount attributed to the exurban household.

Some skeptics, however, insist that SB375’s goal of walkable transit-oriented development is not a realistic solution to global climate change, because most Americans want the typical suburban lifestyle.

The skeptics are wrong.

First, demographics are against them. Many of the 85 million Baby Boomers who are Empty Nesters, or will soon be, are downsizing and moving to more densely-developed urban areas where they can walk to restaurants, stores, theaters, and museums.

Meanwhile, Gen Xers (50 million strong) and Generation Y (76 million . . . and just entering the workforce) don’t want to live in their parents’ suburban neighborhoods, according to a recent RCLCo study. They want more vibrant mixed-use districts, more walkable lifestyles, and more human connections. They want to live close to friends, family, and work, i.e., in compact, pedestrian-friendly, transit-connected, mixed-use districts.

In addition, U.S. household size has shrunk from 3.27 in 1950 to 2.03 in 2000. Only one-third of U.S. households have children today. A 2006 Virginia Tech study found that 38% of today’s U.S. homebuyers prefer attached housing versus 25% of Americans who want a detached single-family house on a large lot.This significant demographic shift is driving market demand away from bedroom communities towards compact, mixed-use, transit-oriented development. In King County, Washington, which includes Seattle and Bellevue, two-thirds of new residential units are now being constructed in downtowns, in suburban town centers, and along light rail and bus lines.

Second, real estate markets are already rewarding walkable mixed-use development. Over the past five years, many urban downtowns and suburban Town Centers have gained thousands of housing units. In California, walkable transit-connected Hollywood, which was given up for dead decades ago, has experienced a residential building boom.

Over the past five years, condominium prices, office rents, and retail sales in “new suburban Main Streets” like Reston Town Center in northern Virginia and Southlake Town Center near Fort Worth, Texas have out-performed comparable properties in nearby sprawling suburbs.

Across the U.S., newly built light rail lines are proving to be magnets for development from Seattle to Denver, Houston, and even Phoenix. Over $6 billion of development is planned along greater Phoenix’s new Valley Metro light rail line that opens this December.

Finally, today’s economic uncertainty and high gasoline prices have caused many Americans to examine the $7,000 to $10,000 they spend annually on a steadily depreciating asset—their cars. If an individual or a couple that lives in a transit-served community sells one car, they can invest that money in education, better housing, or a retirement fund.

Rising gasoline prices are not only taking a financial toll on commuters, they are also lowering residential property values in far-flung exurbs more than in communities closer to the urban core. Home prices in Tampa’s most distant suburbs, for example, fell 14% in the last year, compared to a 9% drop in neighborhoods closer to the city. In Los Angeles County, median home prices fell 23% from May 2007 to May 2008. They fell much more in exurban locations: By 31% in San Bernardino County and by 43% in Victorville, which is 63 miles northeast of Los Angeles.

Still, some skeptics insist that SB375 won’t work, because available land for new growth can only be found at the outermost edges of U.S. metropolitan areas, making sprawl inevitable.

Wrong.

Every U.S. suburb and city has “land banks” hiding in plain sight, including vacant lots, moribund office parks and factories, and outdated shopping centers surrounded by surface parking lots. Check out www.deadmalls.com. All of that land can be redeveloped with transit-oriented housing, workplaces, schools, and other uses.

In 1998, the City of Englewood, Colorado—a working class suburb just south of Denver—demolished the failed Cinderella City mall and replaced it with the compact 55-acre CityCenter Englewood. This walkable district with offices, residences, stores, a public library, an art museum, and a light rail transit station is credited with jump-starting Englewood’s economy. In 2007, it had a 93% residential occupancy rate and a commercial/retail vacancy rate of just 3%.

Skeptics also insist that nothing can be done about sprawl, because we don’t have reliable standards to guide growth.

Wrong again.

The U.S. Green Building Council, for example, has launched the pilot version of its new LEED for Neighborhood Development p rogram that provides the first national standard for neighborhood design that includes compact mixed-use development, walkability, and proximity to transit. Developments that meet these standards will reduce the number of their residents’ and businesses’ automobile trips and therefore their CO2 emissions.

SB375 is a vital new model for U.S. communities and states that must accommodate growth and also reduce their energy use and CO2 emissions. Maryland’s Governor Martin O’Malley, who wants to create a statewide development plan to minimize sprawl and promote development near transit stations to minimize the state’s CO2 emissions, has only to look to SB375 for guidance.

California’s SB375 is not only a much-needed model for the U.S., it is a milestone of worldwide importance. SB375 provides a realistic incentives-based development model for fast-growing Asian and Latin American nations that have adopted our increasingly obsolete and environmentally detrimental suburban sprawl growth patterns to accommodate their rapidly growing populations.

China’s massive construction boom, for example, has given cities like Shanghai and Beijing endless suburbs of high-rise apartment blocks that are accessed almost exclusively by highways. The increasing wealth of millions of Chinese, coupled with sprawl, means that the Chinese are buying cars in record numbers, not only as status symbols, but out of necessity, thereby generating even more CO2 in a nation with the highest CO2 emissions on the planet. India, likewise, is entering a construction and car-buying boom.

If the battle against global climate change is going to have a real chance of success, it’s not enough to install compact fluorescent light bulbs, buy hybrid cars, and develop alternative energy sources. We must tackle the missing piece of the CO2 emissions puzzle: auto-dependent suburban sprawl. With SB375, California offers one hopeful solution.